IKEA Expects Long-Term Savings from Rooftop Solar Rollout

IKEA is pursuing a massive clean-energy program with the installation of solar panels on at least 20 of its 44 U.S. locations. In addition to slashing its need for power generated by fossil-fuel-fired power plants, the home furnishings retailer expects to reduce its long-term operating costs with lower utility bills.

“About a year ago, IKEA made the decision to begin evaluating every location around the world for sustainability,” says Joseph Roth, the company’s national director of public affairs. “We looked not just at stores, but at offices, distribution centers and vacant pieces of land to see what was feasible.”

In years past, IKEA has leased rooftop space to third parties for solar panel installation. Privately held IKEA has more than 320 stores in 38 countries, including 37 in the U.S.

The company began experimenting with purchasing and installing a system of its own last summer at an IKEA store in Tempe, Ariz. The success of that prototype convinced the retailer that similar systems at some of its other locations would be a good investment, according to Roth.

“It became clearer and clearer to us that it was a much more straightforward process and technology than it used to be,” Roth says of the Tempe installation. “And it was more financially feasible as well.”

Photovoltaic cells emit electricity when exposed to sunlight, a technology originated in the 1940s and 1950s to power satellites. Gradual improvements boosted the efficiency direct current (DC) produced by solar panels, but the industry has made great advances in the past 20 years with inverters that convert DC power to usable alternating current.

The owner of a large, commercial installation typically feeds power generated by solar panels directly into the local electrical grid. Arrangements vary by state and municipality, but the utility provider can pay the property owner for electricity produced on the site, deduct the amount of power contributed to the grid from the property owner’s billable consumption, or both. State or federal rebates can also come into the calculation, accelerating the property owner’s savings and ultimate return on investment.

While IKEA doesn’t disclose financial cost or benefit details about its solar initiative, the systems do pay for themselves over time. “We wouldn’t be doing it if we weren’t confident of financial success as well as sustainability,” he says. “It made good business sense and good sustainable sense to take this initiative.”

Work in progress

In June, the company completed its eighth installation of solar panels in the United States, this latest addition being an array of 2,548 panels atop IKEA’s store in West Sacramento, Calif. The store measures 265,000 sq. ft. and the panels cover 65,000 sq. ft. of its roof.

The system in West Sacramento generates a flow of 573 kilowatts and will produce approximately 795,500 kilowatt hours of clean electricity annually – the equivalent of reducing 630 tons of carbon dioxide or eliminating the emissions of 109 cars. In a year, the network of panels will generate enough power to serve 69 homes for a year. IKEA hired Gloria Solar to development, design and install the custom solar power system.

The retailer isn’t yet midway through its solar surge, however. The company plans to complete a dozen similar installations in the coming months – four in California and the remaining eight in the eastern United States.

On May 11, IKEA switched on one of the largest single-roof solar energy systems in California. Covering 370,000 sq. ft. of the company’s Southwest U.S. distribution center in Tejon, the 1.8 megawatt array will crank out a staggering 2.88 million kilowatt-hours of power annually. That’s enough juice to power 241 homes for a year.

“Having solar panels on the roof of this distribution center demonstrates that the company’s sustainable commitment extends beyond our stores into all facets of the retail operations,” Martin Grieder, IKEA’s distribution operations manager for Western North America, said in announcing the project’s completion in May.

The system, designed and installed by California-based REC Solar, will significantly reduce the Tejon distribution center’s carbon footprint and electricity costs, Grieder says. At the same time, the project furthers IKEA’s global initiative to incorporate sustainable practices wherever feasible.

Burning fossil fuels generates carbon in the form of greenhouse gases. By shifting to power generated from solar, wind or other alternative methods, companies are said to lower their carbon footprint, or their net contribution to the production of greenhouse gases.

U.S. a leader in commercial solar

In the United States, there are more than 600 commercial solar power projects totaling 50 kilowatts or larger in the pipeline for development by 2015, according to Solarbuzz, a San Francisco-based researcher that tracks the photovoltaic industry. That amounts to more than 17 gigawatts of generation capacity, which makes the U.S. a top growth market for solar energy.

“The fast developing non-residential segment has created an important and growing opportunity for project developers, engineering, procurement and construction companies,” Solarbuzz researchers stated in a July 6 release.

California accounts for 62% of the U.S. solar project pipeline, driven by the state’s requirement for utility companies to generate 33% of their power from renewable sources, according to Solarbuzz. Similar renewable portfolio standard policies have been a major driver in building the development pipeline in Arizona, Nevada, New Jersey, New Mexico and Texas.

IKEA’s solar rollout

IKEA’s solar installations this year include systems of 302 kilowatts and 290 kilowatts, respectively, on stores in East Palo Alto and Burbank, Calif. A new IKEA store serving the Denver area will feature a 498-killowatt system when it opens on June 27 in Centennial, Colo.

IKEA has installed a 200 kilowatt system at its store in Brooklyn and announced plans for setups of about 1,000 kilowatts each on its stores in Baltimore and College Park, Md.; West Chester, Ohio, in the Cincinnati area; and at stores in Conshohocken and Philadelphia, Penn.

The retailer doesn’t limit its sustainability initiatives to solar power. Other green systems deployed by IKEA include solar water heating in Charlotte, N.C., Draper, Utah and in the Florida cities of Orlando and Tampa. The store in the Denver area even includes a geothermal system.

“Adding solar energy to more U.S. locations is consistent with our commitment to sustainable building practices, so we are thrilled our evaluation determined these projects to be feasible for IKEA,” said Mike Ward, president of IKEA U.S., referring to the installations planned for the East Coast. “We are excited to continue investing in renewable energy projects, reducing our carbon footprint, and improving the lives of many people.”